| dc.description.abstract | Banking sector has an important role in the development of financial system and economy of Vietnam. To survive and growth, banks need profitability as the primary concern for their business. However, in the current business environment with lots of reforms, bank performance tends to decline and be volatile. This brings to the need to investigate the determinants of bank profitability in the case of Vietnam.”
“The current literature of banking profitability is insufficient. By incorporating empirical evidences of other researches in the world, this thesis applies internal factors (i.e., bank capitalization, bank growth, credit risk, liquidity and operating efficiency) into regression models as control variables to examine the effects of these factors.”
“This thesis uses random effects regression models in analysis of unbalanced panel data of 28 commercial banks in Vietnam over the period 2010-2015.” The results of this thesis “supports the effects of internal factors on bank profitability.” Specifically, credit risk, liquidity and operating efficiency are the most important determinants of bank profitability. On ROA operating efficiency and liquidity have negative effects. In term of ROE, Operating efficiency and credit risk have negative effects whereas liquidity has positive effect.
From the results, this thesis suggests that banks should strengthen their risk management and credit analysis as well as lending monitoring to recognize and avoid the loans that are able to become bad debts. In addition, Customer classification and risk classification for collateral types should also be emphasized. Loan purpose should additionally be monitored. That helps decrease liquidity risk for banks. In addition, banks should set up good key performance indicators (KPIs), modernize the operation and management software and technique which are the way to cut cost and increase efficiency in the long term. | en_US |
